Hyundai Dealer Consolidation in California

By leveraging its national marketing efforts and consolidating dealerships, Hyundai is not just surviving, but actually thriving in the Sacramento area. While other brands struggle to sell cars and beg for government bailouts, Hyundai’s sales numbers are what analysts have characterized as decent during a year in which carmakers, especially the Big Three, have experienced plummeting sales.

First, the South Korean carmaker streamlined its local operations in Sacramento by closing Maita Hyundai on Auburn Boulevard. Then Potamkin Automotive, the company that owns Roseville Hyundai, purchased Senator Hyundai on Florin Road and changed the name of the dealership to Sacramento Hyundai. People’s Folsom Lake Hyundai in the Folsom Automall is still in the mix, but they’ve cut back considerably on both new car sales and parts sales. Potamkin has had great success with its Roseville store, which bills itself as “California’s No. 1 volume Hyundai dealer.” The dealership sold more vehicles than any other Hyundai dealer in California for two straight years from 2005 to 2007. Besides selling new and used Mazdas, Roseville Hyundai also operates a general used-car lot, a body shop and a rental car business. Potamkin Automotive operates close to 30 dealerships in California, Florida, Massachusetts, New York, Pennsylvania and Texas. John Watts, parts manager at Sacramento Hyundai, is excited to be onboard with the South Korean car company, citing improved vehicles, marketing support and a great warranty as the three main reasons for the company’s success. Watts, 54, has been the parts man ager at Sacramento Hyundai for just eight months, after working for GM for the majority of his 33-year career in the automotive parts industry. After the GM dealership Watts was working for closed late last year, the industry veteran found himself out of a job. Then Hyundai called him, and he’s glad they did. “I looked at Hyundai—their growth, their market share, their prospects — and I started feeling really positive about them,” Watts said. “They’ve changed in a lot of ways. They’re making higher quality cars and they’re backing them 100 percent, so it’s a winning combination.” Watts cites smart marketing as a major reason for the carmaker’s success. “Hyundai provides massive brand support,” Watts said. “The advertising dollars, the Hyundai Assurance program, the phenomenal job they’ve done of building the brand, it all works together. It’s a very honest, down-to-earth approach to marketing and it has helped strengthen the Hyundai name.” Watts runs a 9,500-square-foot parts department that employs four people, a big change from his GM days that were characterized by big staffs and large departments. Watts prefers Hyundai’s lean and mean approach to doing business, he said. “This is a great group here,” he said. “From the management to the controller, we’re able to get things done quickly around here, which is refreshing. I’m not used to it. As time went on with GM, internal contact and communication diminished and it became very frustrating.” Toby Van Horn, parts manager at Roseville Hyundai, sees the positives associated with the Hyundai brand leading to more sales and lauds the recent consolidation. “Hyundai is in a great position right now,” he said. “The quality has gone up and the prices have gone down. When we bought Senator and Maita closed, it put us in a good spot. Business is up over last year.” Van Horn came to Roseville Hyundai from Folsom Lake KIA and has been the parts manager there for almost a year. He works closely with Watts and the parts department at Sacramento Hyundai, his sister store, he said, to efficiently service the area without overlapping. “We work as a team to service all of our wholesale customers,” Van Horn explained. “We meet weekly to make sure we’re not stepping on each other’s toes. We want to be certain we’re not hurting ourselves by competing against each other.” If the consolidation in Sacramento works for Hyundai, they’ll be doing it throughout the country, Hyundai officials explained, particularly in expensive markets such as California.